POLITICS: A New Idea for Health-Care Reform

This is a copy of the letter I sent my two senators from Arizona this week:

Dear Seantor McCain,

I’m a conservative Arizonan, but I haven’t been too happy with the Republican proposals I’ve seen for health-care reform, especially when it comes to pre-existing conditions. So how about a real compromise?

Why not give Democrats single-payer universal coverage – but only for catastrophic care, while basic care would be covered exclusively by health savings accounts that could be rolled over?

Pay for the catastrophic care with a new payroll tax, that employers pay half of, and require the dollars employers currently spend on health insurance to be transferred to people’s salaries (minus the part for the new tax).

The health savings accounts could work just as they do now, except allowing the money to be rolled over. The same companies that currently manage such accounts could also manage when the catastrophic deductible has been reached and bill the government when it is exceeded.

The deductible itself could be means tested, lower for people with lower incomes and higher for those that are richer. The lowest income people could even be given a tax credit to help pay part of their deductible.

The point is to let people spend their own money and allow the market to truly function. But the catastrophic insurance guarantees that no one need ever be checked for pre-existing conditions, and very few people would ever face bankruptcy due to medical costs. Health insurance companies would largely not be needed, as people would use their own money, and the market would truly function, without the need for much regulation.

The catastrophic insurance would still need regulations and cost controls, but since that insurance would be used by fewer people, hopefully such controls would not distort the market substantially.

And while tort and MediCare reform would be nice, those reforms are of course politically infeasible, so leave them as is.

The more I considered the problem of pre-existing conditions, and the inadequate conservative proposals to solve the problem, the more I realized the Democrats may partially be correct. And what better way to broker a bipartisan solution, then by giving the Democrats a large part of what they want?